FinServ 2018

The rise of NBFCs & Fintechs as financial behemoths

August 28, 2018 | FOUR SEASONS HOTEL, MUMBAI

About

Indian banking industry stood out for its resilience after it emerged unscathed from the global financial crisis of 2008. A lot has changed since then. The banks that were feted for their rootedness then, seem shaky today as they stand crushed under bad loans worth $1.45 billion as of March 2018.

Riddled with scams, investigations and debilitated by toxic loans, most large banks are shying from lending directly to customers, corporate as well as retail. Instead, they are lending to NBFCs, which, in turn, are servicing corporate and retail customers. Has bank’s adversity turned out to be an opportunity for NBFCs?

Loan waivers, demonetization and GST threw a spanner in the works for small finance banks. Sudden surge in bad loans on one hand and complying with stringent RBI regulations as well as lending to weaker sections of the society have made the going tough for them. Yet the promise of more than Rs 30 trillion untapped opportunity continues to inspire the small finance banks.

Reports from the ground suggest that affordable housing (priced at less Rs 25 lakhs) has proven to be uneconomical and most of the action, so far, has remain centered around ‘economic housing’ targeting middle-class population that couldn’t afford houses in big urban centers. While ‘economic housing’ segement is getting crowded, ‘affordable housing’ still remains on the periphery. Should ‘economic housing’ get govt's attention? What more is needed to give a meaningful push to affordable housing?

A recent report by ICRA said that there was an unmet credit demand of around Rs 25 trillion from MSME segment in FY17. The report also said MSME lending is likely to grow 12-14% in the next five years. Given the massive unmet demand, the potential for growth and innovative solutions made possible by the use of technology, MSME lending is attracting both investors as well as entrepreneurs. Where will this interest lead the stakeholders?

Track 1: Digital Banking: Government’s push towards digitization, a young population and millions of smart phone users on one hand and the frenetic exploration of analytics, block-chain, machine learning, and artificial intelligence in making services accessible and efficient for both users and service providers on the other, are changing the face of finserv sector as we have known it. Gauging the big developments.

Track 2: Digital Payments: The Reserve Bank of India recently kicked off a discussion on allowing more entities in the digital payments business. The objective seems to be pushing digital payments that seem to have slowed post demonetization. At present, only 12% of transactions in India are digital. Along with more players, what other steps need to be taken to push digital payments in India?

Track 3: New age fin-tech companies and legacy banks: Thanks to their size and legacy, old banks have not been able to keep up with the young and nimble-footed fin-tech companies that are disrupting all segments of financial services. Building, acquiring or incubating – what is a better option for banks to gain tech prowess?

Paperless lending has come a long way over the last five years reducing costs for lenders and easing the lending process for borrowers. With lower average interest rate as compared to traditional banks, digital lending has found early adoption in India. From merely offering consumer and personal loans, lenders are now growing their lending books by offering educational and micro loans. With more investors picking stake in lending platforms what is the future of digital lending?

SPEAKERS

Anshul co-heads the Consumer and Financial & Business Services (CFB) vertical for Avendus’ investment banking business and is based in Mumbai.

He has over 16 years of investment banking experience across sectors including financial services, consumer and business services. Additionally, he has wide experience of working across aviation and metals & mining sectors.

Prior to joining Avendus, he worked for over 13 years at Rothschild India. At Rothschild, he was responsible for coverage and execution of financial services and aviation verticals. He has rich experience of working on multiple cross border transactions in M&A, private equity syndication and IPO advisory.

Anshul has spent some early years of his career working with Lazard’s investment banking team.

He holds an MBA from IIM Calcutta and a Bachelor of Technology in Production Engineering from Pantnagar University.

He has been with Bank of America for 8 years, starting out as a Director in the Financial Institutions team in Mumbai in 2010. He has been part of various transitions within the FI group in India and took charge as Head of the business in Oct 2013. He has presided over the restructuring of the FI coverage model and managed the transition from a high asset growth strategy to a more return focused growth in revenues.

Prior to this stint with BofAML, Shankar has worked in the FI space for the last 13 years both in India and in various locations internationally. He spent 3 years with Standard Chartered Bank in Capital markets and then as Head of FI for South India. Prior to this he worked with American Express Bank for 10 years from 1996. In AEB, he had long stints in Japan and Germany as a Product Manager and in London as a Relationship Manager handling the Israel, Irish and Scandinavian markets.

Shankar is a Cost Accountant and a Bachelor of Commerce from the Mumbai University.

Ashwin Ramanathan

Partner, AZB & Partners

Ashwin Ramanthan is a partner at AZB & Partners, Mumbai. He graduated with a B.A. LLB. (Hons.) degree from the National Law School of India University, Bangalore in 2000. He is registered as an advocate with the Bar Council of Maharashtra & Goa.

Ashwin began his career with ICICI Limited (the development finance institution that later merged into ICICI Bank) and joined AZB & Partners in 2004. He has been a partner at the Firm since 2007.

Although Ashwin’s initial focus at the Firm was on banking and structured finance, his practice areas now include mergers and acquisitions, the distressed debt markets, fintech and private equity transactions. Ashwin is also active in the derivatives and aviation finance space.

In recent times, he has advised Fairfax in its acquisition of Thomas Cook in India, The Royal Bank of Scotland in its sale of its mortgage and credit card businesses to Ratnakar Bank and ING Vysya Bank in relation to its proposed merger with Kotak Mahindra Bank, besides acting on a number of private equity growth investments in both publicly listed and privately held companies. He is also a part of the regulatory advisory practice at the Firm and regularly advises clients on banking and securities laws and regulations.

Ashwin has been recognized as a leading individual by Asia Pacific Legal 500 for Banking & Finance since 2012, by Chambers & Partners for Aviation since 2013 and Banking & Finance since 2014 and by Who’s Who Legal for Mergers & Acquisitions since 2013.

Alok Mittal

Co founder and CEO, Indifi

Alok is Co-founder and CEO of Indifi, a platform for enabling debt financing for small businesses. He serves as the President of Digital Lenders Association of India.

Alok is also an active angel investor, co-founder of Indian Angel Network, and on the board of TiE (The Indus Entrepreneurs) Delhi.

Prior to starting Indifi, Alok setup and ran Canaan Partners' venture investment business in India, investing in high growth technology and internet startups. Earlier, Alok co-founded JobsAhead.com, a leading web-based recruitment business in India, which was acquired by Monster.com, the global leader in online recruitment.Alok earned a BE in computer science and engineering from the Indian Institute of Technology Delhi and a MS in computer science from UC Berkeley.

Anuj Puri

Chairman, Anarock

Sachin Sharma

Head - Digital Lending, RBL

Sachin is a London Business School graduate with 22 years of experience in strategy, business development, business transformation and P & L management across various geographies in India. He currently leads Digital Lending Business for RBL Bank.

Prior to this Sachin has worked with Religare, ANB Amro bank, ICICI and Citi. He has establishing a unique digital credit business in Supply Chain Finance and is very passionate about applying technology to lending solutions.